Maintaining Economic Momentum by Strengthening the People's Purchasing Power
True success is when growth is felt by the people in the form of decent employment, affordable prices, and increasing prosperity.
Surabaya (ANTARA) - Indonesia’s economy has entered a new chapter. The year 2025 marks an important milestone, with the national economy growing by 5.11 per cent. This figure not only demonstrates domestic economic resilience amid global uncertainty but also reflects that the engines of national consumption and investment are still functioning relatively well.
Indeed, this achievement is considered superior to that of several major regions of the world during the same period.
Moreover, Indonesia has also reached a new historic milestone, with gross domestic product (GDP) per capita surpassing US$5,000 per year for the first time. This achievement signals that the national economic structure is moving towards a more mature phase, with the potential to expand the middle class.
However, behind these macroeconomic achievements lies a fundamental question: to what extent are economic growth and rising average incomes truly felt by the broader public, particularly lower-income and vulnerable groups?
This is where the importance of viewing the people’s purchasing power as a more substantive indicator than mere growth figures becomes apparent.
Public purchasing power is a direct reflection of household economic capacity. When purchasing power strengthens, consumption increases, the production sector moves, and employment opportunities open up. Conversely, when purchasing power weakens, economic growth risks losing its most important foundation — domestic demand.
The experience of various countries shows that economic growth not accompanied by strengthened purchasing power produces only illusory progress. Macroeconomic statistics improve, but the real welfare of the population advances slowly.
Within Indonesia’s economic structure, household consumption remains the largest contributor to gross domestic product. This means that national economic strength is highly dependent on the public’s ability to spend their income in a healthy and sustainable manner.
The greatest challenge currently faced is an employment structure still dominated by the informal sector. The majority of the population works with irregular incomes and limited social protection. In such circumstances, increases in the prices of food, energy, or transportation can rapidly erode household consumption capacity.
For this reason, the success of maintaining economic growth at 5.11 per cent must be read as momentum that needs to be sustained, not merely a figure to be celebrated. Sound growth must be accompanied by policies capable of tangibly strengthening the public’s purchasing power.
The achievement of GDP per capita above US$5,000 also brings new consequences. Economically, this milestone marks a shift in the structure of public consumption. Households are no longer spending their income solely on basic necessities but are beginning to increase their consumption of higher value-added goods and services. This condition opens up growth opportunities for the industrial, services, and creative economy sectors.